If that story were true, the judge would have been kicked off the bench, the lawyer disbarred before the arson charges ever hit, and the insurance guy who wrote the contract would be washing dishes somewhere for his gross oversight.

1. The judge would never have used the term frivolous. There are certain magic words in the law that carry quite a bit of import, so-called "Terms of Art". Frivolous is one of these words. For a judge to call a suit frivolous, he is bound by law to throw it out of court. Not only that, it may indeed subject the plaintiff to a fine, and most certainly would subject his attorney to sanctions of some sort.

2. Any insurance contract worth its salt has exceptions, and arson, or any intentional act on behalf of the insured, would most certainly have been included. If it hadn't, the judge would not have blindly said "You didn't include it, tough loss" There is a great deal of well-settled law on the subject, and just as a man who burns his own house down is not able to collect on the insurance, regardless of the absence of an exceptions clause to that effect, our friend would have been out of luck.

3. The insurance company had several arguments available at trial. one being that insurance coverage is limited to loss. By consuming the cigars in the ordinary course, there is no loss, since the insured received the intended benefit of the cigars themselves.

4. Additionally, were they to argue that it was indeed intentional arson on behalf of the insured, they would have a valid defense (and possibly countersuit for attempted insurance fraud) that a judge is not likely to rule against. However, if they failed to raise this in the initial trial, they are blocked from using it in a later suit, or even an appeal. Furthermore, if they failed to raise such a slam-dunk issue at trial, thus jeopardizing their appeal and instead left it for a later criminal action, the attorneys would be liable for malpractice.

5. The arrest and trial for arson would be criminal, not civil. They may file a complaint, but ultimately it is the state that would bring such an action, and the imprisonment/fine would do the insurance company itself no good. They would be able to then use such a conviction as evidence in any countersuit for damages - but as mentioned earlier, if they had failed to raise this issue in a timely manner in the earlier suit, they would be barred from doing so in a later brought action. Again, forgoing an appeal in order to pursue a criminal action would be malpractice. In addition, our friend would also be able to point to the evidence at the initial trial and use it on his own behalf. The finding of the original judge would be evidence that it was not arson, since the insurance company was required to pay by law, there was no fraud.

6. A very cursory search('cigar & insurance & fire' and 'cigar w/5 insured'), as of last year, of the Westlaw legal database turned up no cases that fit this description. I find it highly unlikely that a judge would rule on such a novel case without writing an opinion. There were several other cases in which people collected on insurance for cigars destroyed by fire - but these were almost universally about cigar shops or distributors whose stock was destroyed by building fires.

But, more importantly, I can give you one, airtight reason why that story can not be true.

7. NO-ONE who could afford and appreciate cigars that are worth almost $1g each would even DARE think of binging on them like that. You would place them lovingly in your humidor and coddle them. Occasionally taking one out to savor the scent, and maybe smoking them on a special occasion (when you could whip them out for a friend and show off). Regardless of price, the people who go to auctions and collect these cigars know that they are of a finite quantity (To be that expensive they are most likely a) Cuban and b) almost 40 years old). If some blowhard actually did something of that sort, they'd probably have a hit put on them by another cigar smoker who's offended at the mere idea of such waste.